Labour rebels hold Budget to ransom

Frank Field leads a new revolt against abolition of 10p starting rate for income tax

Ministers are trying to head off another damaging back-bench Labour revolt today – this time over Gordon Brown's decision in 2007 to abolish the 10p starting rate of income tax. Alarm bells were ringing among Labour whips after 30 of the party's MPs backed a call for full compensation for the low-paid workers who lost out in Mr Brown's final Budget as chancellor in 2007.

They signed an amendment to the Finance Bill which implements this year's Budget. The rebels include Blairites Siobhain McDonagh and Sally Keeble and left-wingers Diane Abbott, Alan Simpson and John McDonnell.

If the amendment is passed, the Budget could not become law – and taxes could not be collected – until all those who lost money from the 10p tax fiasco had been compensated.

The Tories and Liberal Democrats will support the rebels, who would need 32 Labour MPs to vote against the Government to succeed. Defeat would embarrass the Prime Minister, whose authority has been weakened by Commons reversals over residence rights for Gurkha veterans and the Bill to clean up politics after the expenses scandal, and by climbdowns ahead of votes on the Iraq war inquiry and the partial sell-off of the Royal Mail. Frank Field, a former minister for Welfare Reform, and Greg Pope, a former Labour whip, are leading the rebellion.

Mr Field claimed that despite the Government's decision to raise tax allowances to help some of the nine million people who lost out when the 10p tax rate was abolished, 1.3 million people would still be worse off by 2012 and the Government had made "no move" to help them directly.

Mr Brown scrapped the 10p rate to help finance a cut in the basic rate of tax from 22p to 20p in the pound.

Mr Field said: "The Budget debate gives MPs the last chance they will have this side of the general election to deliver justice for the lowest paid workers ... "

Downing Street said the Government had already helped affected workers. The rebels say more than one million people are £1 worse off each week. Treasury ministers say the tax system is too complicated to compensate them all individually.

Brown's 10p tax: Cost of climbdowns

*March 2007

Gordon Brown announces the abolition of the 10p income tax rate in his final Budget as chancellor.

*April 2008

Scrapping of 10p rate takes effect.

*May 2008

Alistair Darling announces £2.7bn compensation package for affected workers, raising the personal threshold for basic-rate taxpayers by £600, making them £120 better off.

*November 2008

Darling announces that the compensation will be made permanent, at a cost of £270m in the 2009-10 financial year.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Sport
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
Fans hold up a scarf at West Ham vs Liverpool
footballAfter Arsenal's clear victory, focus turns to West Ham vs Liverpool
New Articles
i100... she's just started school
News
news
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Sport
football
New Articles
i100... despite rising prices
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Qualified Primary Teaching Assistant

£64 - £73 per day + Competitive rates based on experience : Randstad Education...

Primary KS2 NQTs required in Lambeth

£117 - £157 per day + Competitive London rates: Randstad Education Group: * Pr...

Primary NQTs required in Lambeth

£117 - £157 per day + Competitive London rates: Randstad Education Group: * Pr...

Primary NQTs required in Lambeth

£117 - £157 per day + Competitive London rates: Randstad Education Group: * Pr...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam